© 2025 Seyfarth Shaw LLP Massachusetts Wage & Hour Peculiarities, 2025 ed. | 177 Procedure, which the Massachusetts Appeals Court recognized as “a means for defendants to cap their exposure to attorney’s fees.”1095 F. Arbitration Claims under the Wage Act are arbitrable.1096 Employees have argued that mandatory arbitration clauses in employment agreements should not apply to wage and hour disputes, with at least one plaintiff arguing that arbitration clauses cannot apply to wage disputes because they constitute “special contracts” prohibited under the Wage Act.1097 The Appeals Court, however, rejected that argument, finding that claims under the Wage Act, like other statutory claims, can be arbitrated if the parties have an arbitration agreement that covers wage disputes.1098 The Court found that Massachusetts laws for interpreting contracts should be applied to determine whether an arbitration agreement covers wage disputes.1099 Thus, the Court looked to whether the employee voluntarily entered into the agreement and whether the language of the agreement was broad enough to encompass claims under the Wage Act.1100 While the agreement does not have to expressly mention the Wage Act in order to cover wage disputes,1101 employers that choose to enter into arbitration agreements should draft the agreement broadly enough to reflect their intent to arbitrate wage disputes. Although the Appeals Court found that it could look to state contract law to determine the enforceability of an arbitration agreement, federal law limits a court’s authority to find that an arbitration agreement is unenforceable under state contract law. Under the Federal Arbitration Act (FAA),1102 there is “a liberal federal policy favoring arbitration agreements.”1103 In AT&T Mobility LLC v. Concepcion, the U.S. Supreme Court found that the FAA preempts any state law that undermines the FAA’s purpose of ensuring that arbitration agreements are enforced according to their terms.1104 The extent of the FAA’s preemption is broad, preventing states from using any state laws or rules that would have a disproportionate impact on arbitration agreements in comparison to other types of contracts.1105 Accordingly, the Court struck down a California law deeming class waivers in arbitration agreements to be unconscionable and therefore 1095 Zablocki v. Spencer East Brookfield Reg. School Dist., 97 Mass. App. Ct. 1116, 2020 WL 2374875, *6 n.11 (May 12, 2020). 1096 Dixon v. Perry & Slesnick, P.C., 75 Mass. App. Ct. 271, 273-74 (2009). 1097 Id. 1098 Id. 1099 Id. 1100 Id. at 277-78. 1101 Machado v. System4 LLC, 471 Mass. 204, 217-18, 218 n.19 (2015) (arbitration agreement covering “any claims” arising out of the relationship between the parties covers wage and hour disputes). 1102 9 U.S.C. § 1 et seq. 1103 Perry v. Thomas, 482 U.S. 483, 489 (1987). Note that the FAA does not apply to “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1. Whether this exclusion applies is for a court to decide. See New Prime Inc. v. Oliveira, 139 S. Ct. 532 (2019). 1104 AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 347 n.6, 351 (2011). 1105 Id. at 342.
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